DeFi Lending Alternatives to AAVE & COMPOUND

DeFi Lending Alternatives to AAVE & COMPOUND

By Brawnd0 | CryptoLetter | 27 Jan 2021


While AAVE and Compound shine bright in their deserved glory, there are smaller competitors out there working on getting a piece of the DeFi lending cake for themselves. 

Just like in the real world, there are a ton of firms doing the same thing on the surface but serving different types of clients because of their laser-focused, niche-specific offerings, and for the simple fact that people like to have options. 

You know, it's human nature to want more, to try new things, different products, whatever. People are always going to want options and there’s most definitely room for more DeFi lending applications, especially in these early stages of the industry. 

That said, let's explore some of the latest DeFi lending alternatives; DydX, Cream, and Yield.

dYdX (without a token...yet)

98dd6fcd89c3319736f1ef314da2e4205bcfd46371461845207779eb2429ff6e.jpg

dydX.exchange dashboard (Source)

dydX is a powerful non-custodial DEX on Ethereum geared towards more experienced traders. dydX supports spot, margin, and perpetual trading with the ability to open short or leveraged positions with leverage up to 10x. 

Additionally, the dydX platform lets users lend or borrow any supported digital asset. When borrowing, users use their existing crypto holdings as collateral, and when lending, users simply deposit funds to continuously earn variable interest overtime. 

Pros

  • Established platform, since mid-2018. Most other DeFi protocols are relatively new, launching only in 2020 during the first DeFi boom.
  • Good interest rates for lending, USDC: 27.10%, DAI: 11.17%.
  • Interest is continuously-compounding and all rates are in APR.
  • Passed two security audits from Zeppelin Solutions (link) and Bramah Systems (link).
  • Perfect track record. No lenders have ever lost funds on dYdX.
  • Non-custodial, you remain in full control of your funds at all times.
  • Loans can be repaid at any time.
  • $140M+ total value locked (TVL)
  • $1.2B+ traded on dydX

Cons

  • No native token… yet
  • Rates are dynamic, they can go up and down.
  • Few amounts of tokens to lend (ETH, USDC, DAI)
  • Smaller user base and less liquidity than Compound and Aave

CREAM

ef068a7a189d0dd3bcf0f56948881bb489b82950a3ee95d47c05286757bdbd48.jpg

Cream.Finance dashboard (Source)

C.R.E.A.M. Finance, short for “Crypto Runs Everything Around Me”, is an all-in-one DeFi platform for lending, borrowing, token swaps, payments, and tokenization services for digital assets.

The C.R.E.A.M. Finance lending protocol is a fork of Compound Finance while its AMM-based swap exchange and other functions are based on the code of Balancer, Curve, Uniswap, and Blackholeswap. 

Cream suddenly launched in August 2020 in the midst of the DeFi boom and focuses on supporting relevant and important DeFi cryptoassets. 

Pros

  • Supports lots of cryptoassets (40+ cryptoassets supported for lending and borrowing, mostly DeFi assets, ~ 6 stablecoins).
  • Wide variety of APY percentages for lending different assets ranging from 0.01% to as high as 200%+.
  • Evolving into a blockchain-agnostic, community-governed DeFi protocol.
  • Wide variety of DeFi services to dabble in, all accessible from the C.R.E.A.M. Finance platform.
  • Non-custodial, you remain in full control of your funds at all times.
  • Loans can be repaid at any time.
  • $360M+ total value locked (TVL) 

Cons

  • Not well-established. Only launched unexpectedly in August 2020 during the DeFi boom. 
  • Not innovative or original at all. Cream’s lending protocol is simply a fork of Compound and all of its other features copy other DeFi protocols.
  • Confusing name, NOT to be confused with https://www.creamfinance.com/, which is a TradFi company established in 2012.
  • C.R.E.A.M. Platform still in Beta. Use at your own risk.
  • None of its code has been audited and Cream Finance creator, Jeffrey Huang says it does not need to be audited by anyone else other than the entities which created it (ie. Compound, Balancer, etc.)
  • Rates are dynamic and typically trend towards 0%.
  • 23.1% of the total $CREAM supply has been allocated to the team and advisors of Cream Finance
  • 92.5% of the total $CREAM supply is in control by the team (although, it is stored in a multi-signature wallet that offers access to 12 key-holders)
  • Not niche-specific (no specialization). Cream offers as many DeFi services as possible.

YIELD

6b50e7df6be8ba293e812d0bd22bf6d48239664096047fc86330dc4054334040.jpg

Yield.Credit dashboard (Source)

Yield is a non-custodial P2P lending platform with an incentivized borrowing & lending mechanism using its native cryptoasset $YLD. 

Unlike other lending platforms such as Compound, Aave, and the ones described above, Yield is an individualized lending and borrowing platform (ie. Peer-to-Peer, not pooled). 

Yield offers lenders fixed, guaranteed interest rates and offers borrowers that maintain healthy loans and repay on time $YLD token rewards. 

Pros

  • Individualized loans, meaning Lenders don’t have to worry about market dynamics causing the rates on your active loans to trend to ~0%.
  • Guaranteed fixed interest rates starting at 2% and up to 12.5%.
  • Borrowers earn yield for repaying loans, up to 350 $YLD if they maintain healthy loans and repay them on time.
  • 100% of fees used to buy back $YLD on the open market en masse and burn it, thus reducing the total supply of $YLD.
  • Extensive collateral options (ie. AMPL, tDAI, RFI, tYFI, tWETH, tLINK, tBNT, tUSDC, tWBTC)
  • Non-custodial, you remain in full control of your funds at all times.
  • Loans can be repaid at any time.

Cons

  • Not well-established, Yield only launched in January 2021 and was created by a pseudonymous developer or entity known as Coiner_ .
  • Yield.Credit is still Unaudited. 
  • The platform is still in Beta. Use at your own risk. 
  • Maximize loan size is $50K

Brawnd0
Brawnd0

Crypto news addict


CryptoLetter
CryptoLetter

Straight to the point daily crypto & blockchain news

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.